Microsoft : Financial Statements FY21 Q2

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Microsoft Financial Data - FY21Q2
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Current Financial Statements	Trended Historical Financial Statements
Income Statements	Quarterly Income Statements
Comprehensive Income Statements	Segment History
Balance Sheets	Unearned Revenue
Cash Flows Statements	Yearly Income Statements
Segment Revenue & Operating Income	Return of Cash to Shareholders
Capital Expenditures
We adopted new accounting standards related to revenue recognition and leases effective July 1, 2017. The prior periods presented here have been restated to reflect adoption of these new standards.

Income Statements

MICROSOFT CORPORATION	Back to Main
INCOME STATEMENTS
(In millions, except per share amounts) (Unaudited)
Three Months Ended December 31,	Six Months Ended December 31,
2020	2019	2020	2019
Revenue:
Product	$19,460	$18,255	$35,263	$34,023
Service and other	23,616	18,651	44,967	35,938
Total revenue	43,076	36,906	80,230	69,961
Cost of revenue:
Product	6,058	4,966	9,655	8,271
Service and other	8,136	7,392	15,541	14,493
Total cost of revenue	14,194	12,358	25,196	22,764
Gross margin	28,882	24,548	55,034	47,197
Research and development	4,899	4,603	9,825	9,168
Sales and marketing	4,947	4,933	9,178	9,270
General and administrative	1,139	1,121	2,258	2,182
Operating income	17,897	13,891	33,773	26,577
Other income, net	440	194	688	194
Income before income taxes	18,337	14,085	34,461	26,771
Provision for income taxes	2,874	2,436	5,105	4,444
Net income	$15,463	$11,649	$29,356	$22,327
Earnings per share:
Basic	$2.05	$1.53	$3.88	$2.93
Diluted	$2.03	$1.51	$3.85	$2.90
Weighted average shares outstanding:
Basic	7,555	7,621	7,561	7,628
Diluted	7,616	7,691	7,627	7,701

Comprehensive Income

MICROSOFT CORPORATION	Back to Main
COMPREHENSIVE INCOME STATEMENTS
(In millions) (Unaudited)
Three Months Ended December 31,	Six Months Ended December 31,
2020	2019	2020	2019
Net income	$15,463	$11,649	$29,356	$22,327
Other comprehensive income (loss), net of tax:
Net change related to derivatives	8	(4)	12	(6)
Net change related to investments	(492)	(420)	(693)	157
Translation adjustments and other	741	230	852	(66)
Other comprehensive income (loss)	257	(194)	171	85
Comprehensive income	$15,720	$11,455	$29,527	$22,412

Balance Sheets

MICROSOFT CORPORATION	Back to Main
BALANCE SHEETS
(In millions) (Unaudited)
December 31, 2020	June 30, 2020
Assets
Current assets:
Cash and cash equivalents	$14,432	$13,576
Short-term investments	117,536	122,951
Total cash, cash equivalents, and short-term investments	131,968	136,527
Accounts receivable, net of allowance for doubtful accounts of $642 and $788	27,312	32,011
Inventories	1,924	1,895
Other current assets	12,769	11,482
Total current assets	173,973	181,915
Property and equipment, net of accumulated depreciation of $47,715 and $43,197	51,737	44,151
Operating lease right-of-use assets	10,298	8,753
Equity investments	3,794	2,965
Goodwill	44,219	43,351
Intangible assets, net	6,555	7,038
Other long-term assets	13,561	13,138
Total assets	$304,137	$301,311
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$12,770	$12,530
Current portion of long-term debt	5,387	3,749
Accrued compensation	6,838	7,874
Short-term income taxes	1,562	2,130
Short-term unearned revenue	30,402	36,000
Other current liabilities	10,527	10,027
Total current liabilities	67,486	72,310
Long-term debt	55,136	59,578
Long-term income taxes	26,701	29,432
Long-term unearned revenue	2,985	3,180
Deferred income taxes	174	204
Operating lease liabilities	8,875	7,671
Other long-term liabilities	12,544	10,632
Total liabilities	173,901	183,007
Commitments and contingencies
Stockholders' equity:
Common stock and paid-in capital - shares authorized 24,000; outstanding 7,546 and 7,571	81,896	80,552
Retained earnings	44,973	34,566
Accumulated other comprehensive income	3,367	3,186
Total stockholders' equity	130,236	118,304
Total liabilities and stockholders' equity	$304,137	$301,311

Cash Flows

MICROSOFT CORPORATION	Back to Main
CASH FLOWS STATEMENTS
(In millions) (Unaudited)
Three Months Ended December 31,	Six Months Ended December 31,
2020	2019	2020	2019
Operations
Net income	$15,463	$11,649	$29,356	$22,327
Adjustments to reconcile net income to net cash from operations:
Depreciation, amortization, and other	2,761	3,203	5,406	6,174
Stock-based compensation expense	1,566	1,340	3,022	2,602
Net recognized gains on investments and derivatives	(354)	(203)	(482)	(192)
Deferred income taxes	(17)	(53)	(28)	(230)
Changes in operating assets and liabilities:
Accounts receivable	(4,008)	(4,203)	4,835	5,887
Inventories	788	799	(20)	238
Other current assets	730	165	676	(273)
Other long-term assets	(1,499)	(517)	(1,561)	(850)
Accounts payable	33	(7)	348	(554)
Unearned revenue	(3,227)	(2,936)	(6,291)	(5,828)
Income taxes	(2,368)	(471)	(3,351)	(3,807)
Other current liabilities	1,755	1,489	(1,196)	(1,831)
Other long-term liabilities	893	425	1,137	835
Net cash from operations	12,516	10,680	31,851	24,498
Financing
Repayments of debt	(3,250)	(18)	(3,250)	(2,518)
Common stock issued	302	234	847	661
Common stock repurchased	(6,535)	(5,206)	(13,278)	(10,118)
Common stock cash dividends paid	(4,230)	(3,886)	(8,086)	(7,396)
Other, net	79	(39)	(156)	247
Net cash used in financing	(13,634)	(8,915)	(23,923)	(19,124)
Investing
Additions to property and equipment	(4,174)	(3,545)	(9,081)	(6,930)
Acquisition of companies, net of cash acquired, and purchases of intangible and other assets	(415)	(80)	(896)	(542)
Purchases of investments	(15,092)	(19,011)	(29,672)	(42,401)
Maturities of investments	15,264	11,230	29,530	30,312
Sales of investments	2,421	5,370	4,835	11,749
Other, net	327	0	(1,756)	0
Net cash used in investing	(1,669)	(6,036)	(7,040)	(7,812)
Effect of foreign exchange rates on cash and cash equivalents	14	18	(32)	(54)
Net change in cash and cash equivalents	(2,773)	(4,253)	856	(2,492)
Cash and cash equivalents, beginning of period	17,205	13,117	13,576	11,356
Cash and cash equivalents, end of period	$14,432	$8,864	$14,432	$8,864

Segment Revenue & OI

MICROSOFT CORPORATION	Back to Main
SEGMENT REVENUE AND OPERATING INCOME
(In millions) (Unaudited)
Three Months Ended December 31,	Six Months Ended December 31,
2020	2019	2020	2019
Revenue
Productivity and Business Processes	$13,353	$11,826	$25,672	$22,903
Intelligent Cloud	14,601	11,869	27,587	22,714
More Personal Computing	15,122	13,211	26,971	24,344
Total	$43,076	$36,906	$80,230	$69,961
Operating Income
Productivity and Business Processes	$6,181	$5,182	$11,887	$9,964
Intelligent Cloud	6,492	4,531	11,914	8,420
More Personal Computing	5,224	4,178	9,972	8,193
Total	$17,897	$13,891	$33,773	$26,577

Quarterly Income Statements

Microsoft Corporation	Back to Main
Quarterly Income Statements
(In millions, except per share amounts)
Q1-16	Q2-16	Q3-16	Q4-16	Q1-17	Q2-17	Q3-17	Q4-17	Q1-18	Q2-18	Q3-18	Q4-18	Q1-19	Q2-19	Q3-19	Q4-19	Q1-20	Q2-20	Q3-20	Q4-20	Q1-21	Q2-21
Revenue:
Product	$15,750	$19,431	$15,307	$16,848	$14,968	$18,273	$14,513	$16,057	$14,298	$17,926	$15,114	$17,159	$17,299	$16,219	$15,448	$17,103	$15,768	$18,255	$15,871	$18,147	$15,803	$19,460
Service and other	5,160	5,822	6,210	6,626	6,960	7,553	8,699	9,548	10,240	10,992	11,705	12,926	11,785	16,252	15,123	16,614	17,287	18,651	19,150	19,886	21,351	23,616
Total revenue	20,910	25,253	21,517	23,474	21,928	25,826	23,212	25,605	24,538	28,918	26,819	30,085	29,084	32,471	30,571	33,717	33,055	36,906	35,021	38,033	37,154	43,076
Cost of revenue:
Product	4,035	6,268	3,801	3,776	3,581	5,378	3,075	3,141	2,980	5,498	3,425	3,517	3,649	5,885	3,441	3,298	3,305	4,966	3,376	4,370	3,597	6,058
Service and other	3,172	3,604	3,921	4,203	4,263	4,523	4,985	5,315	5,298	5,566	5,844	6,225	6,256	6,538	6,729	7,114	7,101	7,392	7,599	7,969	7,405	8,136
Total cost of revenue	7,207	9,872	7,722	7,979	7,844	9,901	8,060	8,456	8,278	11,064	9,269	9,742	9,905	12,423	10,170	10,412	10,406	12,358	10,975	12,339	11,002	14,194
Gross margin	13,703	15,381	13,795	15,495	14,084	15,925	15,152	17,149	16,260	17,854	17,550	20,343	19,179	20,048	20,401	23,305	22,649	24,548	24,046	25,694	26,152	28,882
Research and development	2,962	2,900	2,980	3,146	3,106	3,062	3,355	3,514	3,574	3,504	3,715	3,933	3,977	4,070	4,316	4,513	4,565	4,603	4,887	5,214	4,926	4,899
Sales and marketing	3,341	3,954	3,398	3,942	3,218	4,079	3,872	4,292	3,812	4,562	4,335	4,760	4,098	4,588	4,565	4,962	4,337	4,933	4,911	5,417	4,231	4,947
General and administrative	1,084	1,038	1,140	1,301	1,045	879	1,202	1,355	1,166	1,109	1,208	1,271	1,149	1,132	1,179	1,425	1,061	1,121	1,273	1,656	1,119	1,139
Impairment and restructuring	0	0	0	1,110	0	0	0	306	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Operating income	6,316	7,489	6,277	5,996	6,715	7,905	6,723	7,682	7,708	8,679	8,292	10,379	9,955	10,258	10,341	12,405	12,686	13,891	12,975	13,407	15,876	17,897
Other income (expense), net	(295)	(176)	(212)	244	112	117	371	276	276	490	349	301	266	127	145	191	0	194	(132)	15	248	440
Income before income taxes	6,021	7,313	6,065	6,240	6,827	8,022	7,094	7,958	7,984	9,169	8,641	10,680	10,221	10,385	10,486	12,596	12,686	14,085	12,843	13,422	16,124	18,337
Provision for (benefit from) income taxes	952	1,375	1,760	1,013	1,160	1,755	1,608	(111)	1,408	15,471	1,217	1,807	1,397	1,965	1,677	(591)	2,008	2,436	2,091	2,220	2,231	2,874
Net income	$5,069	$5,938	$4,305	$5,227	$5,667	$6,267	$5,486	$8,069	$6,576	$(6,302)	$7,424	$8,873	$8,824	$8,420	$8,809	$13,187	$10,678	$11,649	$10,752	$11,202	$13,893	$15,463
Earnings (loss) per share:
Basic	$0.63	$0.75	$0.55	$0.67	$0.73	$0.81	$0.71	$1.05	$0.85	$(0.82)	$0.96	$1.15	$1.15	$1.09	$1.15	$1.72	$1.40	$1.53	$1.41	$1.48	$1.84	$2.05
Diluted	$0.63	$0.74	$0.54	$0.66	$0.72	$0.80	$0.70	$1.03	$0.84	$(0.82)	$0.95	$1.14	$1.14	$1.08	$1.14	$1.71	$1.38	$1.51	$1.40	$1.46	$1.82	$2.03

Segment History

Microsoft Corporation	Back to Main
Segment Revenue and Operating Income
(In millions)
Revenue	Q1-20	Q2-20	Q3-20	Q4-20	Fiscal Year 2020	Q1-21	Q2-21	Q3-21	Q4-21	Fiscal Year 2021
Productivity and Business Processes	$11,077	$11,826	$11,743	$11,752	$46,398	$12,319	$13,353	$25,672
Intelligent Cloud	10,845	11,869	12,281	13,371	48,366	12,986	14,601	27,587
More Personal Computing	11,133	13,211	10,997	12,910	48,251	11,849	15,122	26,971
Total	$33,055	$36,906	$35,021	$38,033	$143,015	$37,154	$43,076	$80,230
Operating Income	Q1-20	Q2-20	Q3-20	Q4-20	Fiscal Year 2020	Q1-21	Q2-21	Q3-21	Q4-21	Fiscal Year 2021
Productivity and Business Processes	$4,782	$5,182	$4,788	$3,972	$18,724	$5,706	$6,181	$11,887
Intelligent Cloud	3,889	4,531	4,560	5,344	18,324	5,422	6,492	11,914
More Personal Computing	4,015	4,178	3,627	4,091	15,911	4,748	5,224	9,972
Total	$12,686	$13,891	$12,975	$13,407	$52,959	$15,876	$17,897	$33,773

Unearned Revenue

Microsoft Corporation	Back to Main
Unearned Revenue
Q1-16	Q2-16	Q3-16	Q4-16	Q1-17	Q2-17	Q3-17	Q4-17	Q1-18	Q2-18	Q3-18	Q4-18	Q1-19	Q2-19	Q3-19	Q4-19	Q1-20	Q2-20	Q3-20	Q4-20	Q1-21	Q2-21
Unearned Revenue ($ in millions)
Productivity and Business Processes	$8,718	$8,257	$8,006	$10,673	$9,656	$9,839	$9,697	$12,692	$11,808	$11,290	$11,185	$14,864	$13,753	$12,635	$12,679	$16,831	$15,560	$14,266	$14,077	$18,643	$17,675	$16,225
Intelligent Cloud	7,107	6,702	6,679	8,913	8,057	7,676	7,735	11,152	10,156	9,759	9,987	14,706	13,298	12,551	12,531	16,988	15,255	13,766	12,984	16,620	15,039	13,786
More Personal Computing	2,366	2,393	2,427	2,607	2,657	2,476	2,472	2,812	2,940	2,760	2,783	3,150	3,191	2,898	2,925	3,387	3,211	3,189	3,336	3,917	3,591	3,376
Total	$18,191	$17,352	$17,112	$22,193	$20,370	$19,991	$19,904	$26,656	$24,904	$23,809	$23,955	$32,720	$30,242	$28,084	$28,135	$37,206	$34,026	$31,221	$30,397	$39,180	$36,305	$33,387
Unearned Revenue (in %)
Productivity and Business Processes	48%	47%	47%	48%	47%	49%	49%	48%	47%	47%	47%	45%	45%	45%	45%	45%	46%	46%	46%	48%	49%	49%
Intelligent Cloud	39%	39%	39%	40%	40%	39%	39%	42%	41%	41%	41%	45%	44%	45%	45%	46%	45%	44%	43%	42%	41%	41%
More Personal Computing	13%	14%	14%	12%	13%	12%	12%	10%	12%	12%	12%	10%	11%	10%	10%	9%	9%	10%	11%	10%	10%	10%
Total	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%

Yearly Income Statements

Microsoft Corporation	Back to Main
Yearly Income Statements
(In millions, except per share amounts)
FY16	FY17	FY18	FY19	FY20
Revenue:
Product	$67,336	$63,811	$64,497	$66,069	$68,041
Service and other	23,818	32,760	45,863	59,774	74,974
Total revenue	91,154	96,571	110,360	125,843	143,015
Cost of revenue:
Product	17,880	15,175	15,420	16,273	16,017
Service and other	14,900	19,086	22,933	26,637	30,061
Total cost of revenue	32,780	34,261	38,353	42,910	46,078
Gross margin	58,374	62,310	72,007	82,933	96,937
Research and development	11,988	13,037	14,726	16,876	19,269
Sales and marketing	14,635	15,461	17,469	18,213	19,598
General and administrative	4,563	4,481	4,754	4,885	5,111
Impairment and restructuring	1,110	306	0	0	0
Operating income	26,078	29,025	35,058	42,959	52,959
Other income (expense), net	(439)	876	1,416	729	77
Income before income taxes	25,639	29,901	36,474	43,688	53,036
Provision for income taxes	5,100	4,412	19,903	4,448	8,755
Net income	$20,539	$25,489	$16,571	$39,240	$44,281
Earnings per share:
Basic	$2.59	$3.29	$2.15	$5.11	$5.82
Diluted	$2.56	$3.25	$2.13	$5.06	$5.76

Return of Cash to Shareholders

Microsoft Corporation	Back to Main
Return of Cash to Shareholders
(In billions, except per share amounts)
FY10	FY11	FY12	FY13	FY14	FY15	FY16	FY17	FY18	FY19	FY20
Yearly
Dividend Per Share	$0.52	$0.64	$0.80	$0.92	$1.12	$1.24	$1.44	$1.56	$1.68	$1.84	$2.04
Total Dividends	4.539	5.403	6.720	7.695	9.270	10.050	11.331	12.048	12.916	14.101	15.483
Share Buyback	10.836	11.458	4.000	4.607	6.409	13.209	14.800	10.283	8.600	16.799	19.688
Q2-05	Q3-05	Q4-05	Q1-06	Q2-06	Q3-06	Q4-06	Q1-07	Q2-07	Q3-07	Q4-07	Q1-08	Q2-08	Q3-08	Q4-08	Q1-09	Q2-09	Q3-09	Q4-09	Q1-10	Q2-10	Q3-10	Q4-10	Q1-11	Q2-11	Q3-11	Q4-11	Q1-12	Q2-12	Q3-12	Q4-12	Q1-13	Q2-13	Q3-13	Q4-13	Q1-14	Q2-14	Q3-14	Q4-14	Q1-15	Q2-15	Q3-15	Q4-15	Q1-16	Q2-16	Q3-16	Q4-16	Q1-17	Q2-17	Q3-17	Q4-17	Q1-18	Q2-18	Q3-18	Q4-18	Q1-19	Q2-19	Q3-19	Q4-19	Q1-20	Q2-20	Q3-20	Q4-20	Q1-21	Q2-21
Quarterly
Dividend Per Share	$0.08	$0.08	$0.08	$0.08	$0.09	$0.09	$0.09	$0.10	$0.10	$0.10	$0.10	$0.11	$0.11	$0.11	$0.11	$0.13	$0.13	$0.13	$0.13	$0.13	$0.13	$0.13	$0.13	$0.16	$0.16	$0.16	$0.16	$0.20	$0.20	$0.20	$0.20	$0.23	$0.23	$0.23	$0.23	$0.28	$0.28	$0.28	$0.28	$0.31	$0.31	$0.31	$0.31	$0.36	$0.36	$0.36	$0.36	$0.39	$0.39	$0.39	$0.39	$0.42	$0.42	$0.42	$0.42	$0.46	$0.46	$0.46	$0.46	$0.51	$0.51	$0.51	$0.51	$0.56	$0.56
Total Dividends	0.868	0.860	0.857	0.846	0.926	0.916	0.897	0.980	0.978	0.952	0.938	1.034	1.023	1.020	0.998	1.157	1.155	1.158	1.157	1.152	1.139	1.130	1.118	1.363	1.349	1.350	1.341	1.683	1.683	1.678	1.676	1.933	1.925	1.921	1.916	2.332	2.322	2.309	2.307	2.547	2.532	2.496	2.475	2.868	2.842	2.821	2.800	3.024	3.012	3.009	3.003	3.238	3.232	3.226	3.220	3.544	3.526	3.521	3.510	3.886	3.876	3.865	3.856	4.230	4.226
Share Buyback	0.655	2.420	4.302	3.029	7.666	4.879	4.175	6.965	6.037	6.744	7.367	2.348	4.081	1.020	4.975	5.966	2.234	0	0	1.445	3.583	2.000	3.808	4.000	5.000	0.827	1.631	1.000	1.000	1.000	1.000	1.000	1.607	1.000	1.000	1.500	2.000	1.791	1.118	2.000	2.000	5.000	4.209	4.000	3.600	3.600	3.600	3.550	3.533	1.600	1.600	1.600	1.800	3.100	2.100	2.600	6.100	3.899	4.200	4.000	4.600	6.000	5.088	5.270	5.750

CapEx

Microsoft Corporation	Back to Main
Capital Expenditures Including Assets Acquired Under Capital Leases
(In billions)
Q1-16	Q2-16	Q3-16	Q4-16	Fiscal Year 2016	Q1-17	Q2-17	Q3-17	Q4-17	Fiscal Year 2017	Q1-18	Q2-18	Q3-18	Q4-18	Fiscal Year 2018	Q1-19	Q2-19	Q3-19	Q4-19	Fiscal Year 2019	Q1-20	Q2-20	Q3-20	Q4-20	Fiscal Year 2020	Q1-21	Q2-21	Q3-21	Q4-21	Fiscal Year 2021
Capital expenditures including assets acquired under capital leases	$1.5	$2.0	$2.3	$3.1	$8.9	$2.3	$2.5	$2.1	$3.3	$10.2	$2.7	$3.3	$3.5	$4.1	$13.6	$4.3	$3.9	$3.4	$5.3	$16.9	$4.8	$4.5	$3.9	$5.8	$19.0	$5.5	$5.4	$10.9